Maui County Property Taxes: Understanding Assessed Values, Classifications and Rates

As many of the buyers of Maui real estate purchasing the property as a second home, the way property taxes are assessed here may differ from how properties are assessed in their home state or county.  

Each Year, Maui County will assess both property values and establish new rates.  The 2016-2017 rates follow below:

While the county assess rates on a /$1000 basis, when coming up with figures, I find it easiest to use $1M.  For example, if buying a condominium that will be rented as a vacation rental, it would fall under the Hotel & Resort category, which is $8.71/$1000.  If you are buying a property assessed by the county at $1,000,000, it would be $8,710/year.  If the property is $500,000, it would be half that, or $4,355.  The following is a brief overview that should help you better understand the assessment process, rates, and classifications:

Maui County Property Tax Overview:

Each year, Maui County assesses real property taxes, establishes assessed property values, and determines rates for the various property classifications.

Property Taxes are based on a formula, whereby the Assessed Value (minus any applicable exemptions) is multiplied by the Classification Rate

• The fiscal year begins July 1^st and ends June 30^th of the following year.
• Property tax assessments are based on comparable sales that recorded up to June 30^th prior to the assessment date.  The assessed values represent 100% of the full, unencumbered fee simple market value.
  As an example:
  To establish the assessed value of a property for the 2016 assessment year, the sale period used is from July 1, 2014 to June 30, 2015. Any sales occurring after this time frame will be reflected in the following year’s assessment.*
• The assessed value is multiplied by the tax rate for the classification of the property, which is based upon the highest and best use
• The county will mail a form for the owner to declare their use
• If a member of a condominium association (Association of Apartment Owners), the AOAO is required to file a use declaration annually.  This helps the county monitor accurate reporting of the classifications.
• When purchasing a property, the Buyer will pay the tax rate based on the prior owner’s classification until the next fiscal year.   This may be a higher or lower rate than the Buyer’s intended use of the property. The county will send a form to owners to declare their use.
• Each year, the county determines and announces the tax rates.

Property Tax Classifications/Rates: 

• Properties that have been granted a homeowner exemption, are classified as Homeowner.
• A property owner that uses the property as a second home (no short term rentals) or rents the property long term (180 days or longer) will be categorized by the classification (e.g., Residential, Apartment, Ag).
• Condominiums are classified upon consideration of their actual use (e.g., Homeowner, Apartment, Hotel/Resort).
• Properties which have been granted a bed and breakfast permit, a transient vacation rental permit, or conditional permit to operate a transient vacation rental are classified as Commercialized Residential

For most buyers of residential property or condominiums, use might be one of the following:

• Homeowner: Primary residence (files income taxes in the state of Hawaii)
• Residential/Apartment: either uses it solely as a second home, or rents long term (a rental of 180 days ore more)
• Hotel/Resort: condominium apartment owner who rents the property short term (any period less than 180 days).
• Commercialized Residential: residential owners with permits to rent short term.

Appeals and Contact Information:

*Taxes often are not reflective of the current market condition, as the current assessment reflects the real estate market based on comparable sales before June 30^th prior to the assessment date.

An owner may appeal with the county if they disagree with either the usage or the assessed value.  There is a fee to appeal to the Board of Review.  All appeals must be received by the appeal deadline.

County of Maui Real Property Tax Division
70 East Kaahumanu Ave
Maui Mall, Suite A-16
Kahului, HI 96732
Phone: (808) 270-7297
Fax: (808) 270-7884

Important Dates:

**The County of Maui website indicates two dates as the deadline—April 9^th and 11^th, so please confirm on the county website. 

The above is a brief overview of information frequently requested by buyers.  More comprehensive information can be found at the county of Maui’s Property Tax website. www.mauipropertytax.com > Real Property Tax Info. Buyers may wish to consult with their tax professional or contact the County of Maui with any questions.

You may also search property records at www.mauipropertytax.com